Is it time for a financial health check midlife MOT?

Financial health check midlife MOT

Each year, it’s a legal requirement to take your car for an MOT, and if you drive, you’ll know all too well about the fun that can come with it. Although sometimes painful to go through, it’s a prompt to make sure your car stays on the road and gets you safely from A to B.

Much like a car, as we get older, more things need attention; just like you might find yourself visiting the doctor to check in on your health a little more frequently, the same should apply to your finances. It’s all about prevention rather than the cure.

Having a financial health check to see if your finances are in good enough shape to support you and your family is an essential part of your overall wellbeing and achieving those goals or yours. Investing time in ourselves today will open the doors to tomorrow’s opportunities.

It’s unlikely that you ever look forward to having a financial health check or taking your car for its MOT, for that matter, but rather than carrying on blindly, a financial mid-life MOT might be just what you need.

What is a financial health check midlife MOT?

Now seen as your third-age, retirement is a time to look forward to, and a time with endless possibilities. But as the State Pension Age continues to creep up, and we are all living longer, the amount needed to fund retirement grows.

According to research by The Investing and Saving Alliance (TISA), two-thirds of people aged 50 to 65 were under-saving for retirement even before the financial impact of the Covid-19 pandemic. As well as a reported 17% of people in the UK aged 55 and over having no pension savings at all.

Whilst earning, it’s hard to know where to prioritise and spend your money. Balancing living now and saving for the future is difficult. You might have accumulated money in different pots, but are they the right ones? It’s a constant trade-off between mortgage payments and pensions, and who knows if you’re getting it right.

If this sounds familiar, then it’s probably time you take a financial health check mid-life MOT; designed to encourage those aged 45 – 60 to see how prepared they are for later life and take action if there are any identified shortfalls. It’s a way to understand how the individual parts of your finances work together, whether they need fine-tuning or a bit more work. And, just like with your car, regularly checking in means a smoother journey and gets you there safely.

How is your retirement shaping up?

According to research by, 45% of British adults hope for a retirement income of at least £20,000 a year. With 61% hoping for at least £10,000. Yet, the maximum state pension for 2021 sits at just £9,339 per year.

To put this into real-life context, the Pensions and Lifetime Savings Association published the Retirement Living Standards to help you visualise how much your ideal lifestyle in retirement would cost. The most basic retirement needs require a minimum of £10,200 per year for a single person. For a moderate lifestyle, you’d need £20,200 per year, and for a comfortable retirement, it would take £33,000.

By arming savers with these figures, they hope savers can get themselves to where they need to be by the time they retire.

So, the next step as part of your financial health check, now you roughly know what you need to live in retirement, is to work out what you’ve got coming your way once you get there:

  • How much is your state pension worth, and when can you claim it?
  • Do you know how much your workplace/personal pension could be worth when you retire?
  • Do you have any other means of income in retirement?

Once you have a rough total, it’ll be clearer to see if there’s a gap that needs bridging and by how much.

If you’re not sure how to start collating this information, we have a beginners guide to retirement planning neatly packaged with helpful tips and tools.

We also find cash flow modelling an invaluable tool when performing a financial health check. This software helps forecast your wealth over your lifetime to help you get answers to questions you have on retirement.

Thinking about your work, wellbeing and wealth

A mid-life MOT is a time for reflection, as well as forward-thinking. And as part of your financial health check, it focuses on the three w’s: Work, Wellbeing and Wealth.

Your work

At different stages in your working life, your job will have come into question. Whether you faced the chance of redundancy or wanted a change of direction, it was no doubt a difficult time.

To build financial strength and resilience, you need to ask questions about your career.

Are you still satisfied in your current role? Are you continuing to advance your skills and commit time to your professional development, taking part in courses and learning new skills? Do you still have a healthy work/life balance? Are your prioritising yourself, and have you found a routine that works best for you?

Have you considered how the future looks? Will you go part-time or change roles in a bid to wind down before retirement?

The answers to these questions will help shape your finances in the future.

Your wellbeing

More often than not, the final push to retire typically comes down to health. But no one should get to that point.

Investing time in yourself and prioritising your health and wellbeing whilst you work is crucial to a happy and healthy retirement.

Everyone is different, but what’s most important is listening to your body and making changes when you’re not feeling your best. We’ve put together some tips to help you on your path to finding the right balance in life.

Your wealth

And last but not least, you’ll benefit from a regular financial health check to ensure your financial situation is fit for purpose and you’re still on track to help you get to where you want to be in life.

If you’re not too sure where to start when performing a financial health check, here are a few questions to give you an idea. Do you…

  • know how much you’re spending/saving?
  • have enough to sustain your current lifestyle?
  • have 3 – 6 months worth of income set aside as a cash buffer?
  • know what your pensions options are?

Some tools to help you improve your work-life, wellbeing and financial health:

And, you can always have a chat with one of our independent financial planners. If you have any questions regarding your financial health check, feel free to get in touch with us, and we’ll get back to you very soon.